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Journal of Internet Commerce

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E-Commerce Adoption: Perceptions of Managers/ Owners of Small- and Medium-Sized Enterprises (SMEs) in Thailand
Janejira Sutanonpaiboon & Ann M. Pearson
a b a b

Sonama State University, CA, 94928 Southern Illinois University, Carbondale, IL, 62901 E-mail:

Available online: 22 Sep 2008

To cite this article: Janejira Sutanonpaiboon & Ann M. Pearson (2006): E-Commerce Adoption: Perceptions of Managers/ Owners of Small- and Medium-Sized Enterprises (SMEs) in Thailand, Journal of Internet Commerce, 5:3, 53-82 To link to this article: http://dx.doi.org/10.1300/J179v05n03_03

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E-Commerce Adoption: Perceptions of Managers/Owners of Small- and Medium-Sized Enterprises (SMEs) in Thailand
Janejira Sutanonpaiboon Ann M. Pearson

ABSTRACT. E-commerce can be an important source of competitive advantage for most business organizations, especially small- and medium-sized (SMEs) businesses. Recently, researchers have focused on e-commerce adoption both in the United States and other countries. This study examines the factors that influence e-commerce adoption in Thailand. The results show that the major reason behind e-commerce nonadoption is that the organization is not ready to make that change because of cultural, technological, financial, and/or logistical reasons. Additionally, organizational readiness strongly influences e-commerce implementation, and managerial support and financial, logistical, and technological factors weigh heavily in determining if an SME in Thailand can pursue e-commerce implementation. We believe that the e-commerce adoption model in this study will have both managerial implication for practitioners in Thailand, as well as those in other developing countries, and
Janejira Sutanonpaiboon is affiliated with School of Business, Sonama State University, CA 94928. Ann M. Pearson is doctoral student, Southern Illinois University, Carbondale, IL 62901 (E-mail: apear15@siu.edu). Address correspondence to: Janejira Sutanonpaiboon, Mailcode 4627, Southern Illinois University, Carbondale, IL 62901 (E-mail: Janejira@siu.edu). Journal of Internet Commerce, Vol. 5(3) 2006 Available online at http://jicom.haworthpress.com 2006 by The Haworth Press, Inc. All rights reserved. doi:10.1300/J179v05n03_03

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academic implications for researchers who are interested in e-commerce adoption in developing countries. doi:10.1300/J179v05n03_03 [Article copies available for a fee from The Haworth Document Delivery Service: 1-800HAWORTH. E-mail address: <docdelivery@haworthpress.com> Website: <http://www.HaworthPress.com> 2006 by The Haworth Press, Inc. All rights reserved.]

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KEYWORDS. E-commerce, technology adoption, developing countries, Thailand

INTRODUCTION Even though the Internet has existed for several decades, electronic commerce (e-commerce) has become a reality only with the development of the World Wide Web (WWW) and its associated technologies (Napier, Judd, Rivers, and Wagner, 2001). E-commerce has been defined as the process of buying, selling, transferring, or exchanging products, services, and/or information via computer networks, including the Internet (Turban, McLean, and Weatherbe, 2004). Among the benefits to organizations, it has been suggested that e-commerce can reduce the cost of doing business, improve product quality, reach new customers or suppliers, and create new ways of selling existing products (Chaudhury and Kuilboer, 2002; Napier et al., 2001; Saloner and Spence, 2002; Schneider and Perry, 2000). These benefits can be achieved in both small and large companies (Huff, Wade, Parent, Schneberger, and Newson, 2000). Among the studies that have focused on technology adoption, only a few have been devoted to the adoption and use of e-commerce in smalland medium-sized enterprises (SMEs) (see for example, Grandon and Pearson, 2003; Mirchandani and Motwani, 2001; Riemenschneider and McKinney, 2001). It is generally accepted that SMEs play an important role in the economies of their countries. For example, SMEs represent 99 percent of businesses, employ more than half of the American work force, and create two-thirds of the new jobs in the United States (www. sba.com). Although there are many potential advantages, the adoption of e-commerce by SMEs remains limited. According to a survey by the Gallup Organization (www.gallup.com), small businesses are establishing Web sites primarily to advertise and promote their business, rather than to conduct e-commerce. This survey found that the number

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of small firms that established a Web site to advertise and promote their business increased 123 percent from 1999 to 2003, while small businesses establishing Web sites primarily to sell products actually decreased 48 percent during the same period. Thailand is one of the developing countries that has begun to utilize e-commerce in both domestic and international business. According to a study conducted by the United Nations on Internet usage in seven Southeast Asian countries, Thailand was identified as a country with a good chance of becoming an online nation (www.itu.int/publications/ default.aspx). Internet usage started in Thailand in 1987 when the Inter-University Network Project was initiated by the National Electronics and Computer Technology Center (NECTEC), the National Science and Technology Development Agency (NSTDA), and the Ministry of Science, Technology, and Environment (MoSTE). In December 1998, the government of Thailand established the Electronic Commerce Resource Center (ECRC) to advance e-commerce development in Thailand. This initiative was intended to help Thailand become internationally competitive, by creating the infrastructure necessary for the development of e-commerce (www.ecommerce.or.th/about.html). There are approximately 6.97 million Internet users in Thailand as of May 2005, which represents more than 10.65% of Thailands population (http://iir.ngi.nectec.or.th/). Currently, the government of Thailand is implementing an e-Thailand project. The e-Thailand project consists of e-Government, e-Education, e-Society, e-Industry, and e-Commerce. Especially relevant to the successful implementation of e-commerce are Thailands e-Society and e-Commerce initiatives. E-Society is the attempt to (1) expand the use of information technology to every part of Thai society; (2) support the use of IT in education; (3) develop the understanding and enthusiasm in IT application in every level of Thai society; (4) develop IT expertise in the Thai society; and (5) create a network among government, businesses, and general population to build a knowledge society. The e-Commerce initiative is aimed specifically to (1) improve electronic monetary services; (2) facilitate and build trust in e-business activities; (3) develop e-commerce law and regulations; (4) link and utilize the information among government, businesses, and service sections; and (5) improve the management of back-office systems, service systems, and transportation systems for the manufacturing processes and services (www.ethailand.or.th/). It can be seen that there has been a significant effort to implement information technology, the Internet, and e-commerce in Thailand; there-

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fore, there is a need to examine the factors that influence e-commerce adoption in Thailand. The major inquiry of this study is to answer questions such as: What is the current level of e-commerce utilization in these businesses? How do individual and organizational characteristics impact e-commerce adoption? And what factors influence e-commerce adoption among Thai SME owners? Small- and medium-sized enterprises (SMEs) have different characteristics from large enterprises. According to Seyal and Rahman (2003), the characteristics of SMEs include small management teams, strong owner influence, lack of staff in specialized areas like information technology (IT), multifunctional management, limited control over their business environment, limited market share, low employee turnover, a reluctance to take risks, and avoidance of sophisticated software or applications. Due to these differences, SMEs have a slower technology adoption rate and more difficulties realizing the technologys benefits than large enterprises (Poon and Swatman, 1999). In 2002, there were more than 850,000 SMEs and they constituted over 90% of the total enterprises in Thailand (www.actetsme.org/thai/thai98.htm). The distribution is as follows: Manufacturing Service Wholesaling Retailing Other 19% 26% 3% 30% 22%

As mentioned earlier, the Thai government has created numerous programs and committed significant resources to the development of this important economic segment. This study, therefore, focuses on e-commerce adoption among SMEs in Thailand. LITERATURE REVIEW E-commerce can become an important source of competitive advantage for most business organizations. It can be used to communicate virtually with an organizations existing customers, gather strategic information about these individuals/businesses, and then personalize the organizations transactions with these customers. With e-commerce, a company can bypass intermediaries in the value chain and deliver new or existing products and services without the costs that exist via tra-

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ditional delivery methods. E-commerce can also provide convenience to the customers by allowing them to access information about products or services 24 hours a day, 7 days a week. This allows the company to develop a more direct relationship with customers.
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Technology Adoption Several theories/models have been suggested as appropriate for the study of technology adoption. Each theory/model has been utilized in numerous studies that have focused on the intention to adopt or to use a specific information technology. The most popular of these include the Theory of Reasoned Action (TRA), Technology Acceptance Model (TAM), Theory of Planned Behavior (TPB), Innovation Diffusion Theory (IDT), Social Cognitive Theory (SCT), and most recently, the Unified Theory of Acceptance and Use of Technology (UTAUT). See Venkatesh, Morris, Davis, and Davis (2003) for a comprehensive review of these theories/models. Most of these theories/models are based on the idea that an individuals adoption of a new technology determined by factors that are perceived to influence intention to use the technology. These factors vary according to the theory or model that is being used in that particular research. For example, the Technology Acceptance Model (TAM) suggests that adoption is based on two related constructs: perceived ease of use and perceived usefulness. Also embedded within these theories or models is the idea that they are focused on predicting the behavior of the user of the technology. This unfortunately creates problems when a researcher(s) tries to apply these theories or models to something like e-commerce adoption. Many times, the decision to integrate e-commerce into business operations is determined by the perceived strategic value that can be achieved through this investment, not on perceptions of the individual customer. Perceived strategic value can take many forms but generally includes items such as increased number of transactions, new customers, increased profit margins, better service to key customers, and increased market share. E-Commerce Adoption E-Commerce adoption in small- and medium-sized businesses has only recently gained attention in the academic press. Most of the published work on e-commerce adoption prior to 2005 focused on how organizations in developed countries have integrated this business capability

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into their organizations. A study focusing on e-commerce adoption was presented by Mirchandani and Motwani (2001). They investigated factors that differentiated adopters from non-adopters of e-commerce in small businesses. The relevant factors included enthusiasm of the top management, compatibility of e-commerce with the work of the company, relative advantage perceived from e-commerce, and knowledge of the companys employees about computers. Factors found not to be influential included the degree of dependence of the company on information, managerial time required to plan and implement the e-commerce application, the nature of the companys competition, and the financial cost of implementing and operating the e-commerce application. An organizations size has also been identified as an adoption facilitator. Zhu, Kraemer, and Xu (2002) indicated that small firms are less likely to adopt e-business because (1) they tend to have fewer slack resources to facilitate adoption; (2) they are less likely to achieve economies of scale, which is an important concern due to the substantial investment required for e-business projects; (3) they are less capable of bearing the high risk associated with early stage investment in e-business; and (4) they lack the necessary market power to influence trading partners to adopt the e-commerce technology. These researchers also identified technology competence, firm scope, consumer readiness, and competitive pressure as significant adoption facilitators. Organizations with higher levels of technology competence and greater scope are more likely to adopt e-business, while higher level of consumer readiness and competitive pressure are environmental stimulators. Lack of trading partner readiness, on the other hand, slows e-commerce adoption. A study by Grandon and Pearson (2004) investigated factors that influenced e-commerce adoption/non-adoption by SMEs in the United States. They found that the enthusiasm of top management, compatibility with the companys work environment, perceived advantage from e-commerce, and knowledge of the companys employees about computers were significant factors that differentiated between adopters and nonadopters of e-commerce. Consistent with the findings of Mirchandani and Motwani (2001), factors such as the degree of dependence of the company on information, managerial time required to plan and implement the e-commerce application, the nature of the companys competition, and the financial cost of implementing and operating the ecommerce application were not found to be influential in e-commerce adoption.

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E-Commerce Adoption in Developing Countries Research related to e-commerce implementation is even scarcer when it applies to developing countries. Many of the developing countries are making rapid advances in integrating the necessary technological infrastructure to support new and innovative applications such as e-commerce. China, for example, has the third largest Internet user population and is expected to emerge as the largest Internet and e-commerce market in the world (Stylianou, Robbins, and Jackson, 2003). However, China is still slow in integrating e-commerce due to infrastructure deficiencies, particularly with regard to payment systems, government regulations, and telecommunications. Yet in spite of these deficiencies, most Chinese business managers have a positive attitude toward e-commerce and agree that e-commerce can have three important roles: enhancing the global presence of the firm, creating new business processes and distribution channels, and enhancing customer satisfaction and business relationships (Stylianou et al., 2003). India is another country that is beginning to integrate e-commerce technology. Approximately 23% of the top 500 Indian companies have already initiated some form of e-commerce activities, and Indians domestic e-commerce market is expected to expand from $65 million in 2000 to approximately U.S.$500 million in 2005. In addition, Nasscoms joint report with the Boston Consulting Group predicts a U.S.$9 billion business opportunity for Indian IT companies from global e-commerce markets by 2005 (a one to three percent share of the overall e-commerce market) and U.S.$13-33 billion (a two to five percent share of the overall e-commerce market) by 2010 (Sharma and Gupta, 2003). Nevertheless, e-commerce adoption in India has been relatively slow as there are still problems related to online authorization of credit cards, inadequate telecommunications infrastructure, and a relatively small online population (Sharma and Gupta, 2003). In Latin America, Chile provides a good case study as it has many characteristics that should make e-commerce initiatives a success (Grandon and Mykytyn, 2004). Compared with other developing countries in Latin America, Chile is relatively advanced in terms of its telecommunication infrastructure, which is a crucial requirement in e- commerce implementation. As of 2004, more than 20% of the Chilean population are Internet users, and approximately 22% of small and medium businesses (SMEs) in Chile are connected to the Internet. This is critical as 80% of the Chilean economy is made up of SMEs and 49% of the employment in Chile is generated by SMEs. According to Grandon and Pearson (2003), the B2B

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segment accounted for most of the e-commerce in Chile in 2002 and the total sales was approximately U.S.$2,470 milliona 75% increase from 2001, while the B2C segment had the total sales of U.S.$40 million in 2002a 30% increase from 2001 (Grandon and Pearson, 2003). A study by Grandon and Pearson (2003) investigated factors that influenced e-commerce adoption/non-adoption by SMEs in Chile. In a study of 83 SMEs, these researchers found that managers/owners most receptive to adopting e-commerce believe they posses the financial and technological resources necessary to implement this initiative, see ecommerce as increasing managerial productivity and supporting strategic decisions, feel external pressure to put e-commerce in operation, perceive e-commerce as compatible with preferred work practices and existing technology infrastructure, and perceive e-commerce as useful to their organization. Non-adopters, generally, did not believe that e-commerce would provide these benefits to their businesses. According to a study by Corbitt and Thanasankit (2002), e-commerce is adopted by businesses and government units to achieve best practices, gain operational efficiencies, become modern, obtain strategic value for their organization, and external competitive forces mandate an e-commerce initiative. These authors also indicated that governments are developing e-commerce policies in both developed and developing countries. These policies can be classified into two different types. Type 1 are e-commerce policies that have been created and implemented in developed countries, with large populations, very large gross domestic product (GDP) and where there is significant venture capital available to support new business ventures. These policies are very supportive of e-commerce and operate in an environment where the private sector is expected to take the lead, where government is to provide the legal framework to enable e-commerce, and where funding of e-commerce initiatives is the responsibility of business and risk takers in the business community. Type 2 are e-commerce policies that have been developed and implemented in a variety of developing countries. In these countries, the role of government in e-commerce is one of intervention, providing not only the legal and logistics environments needed for e-commerce, but also providing substantial resources for infrastructure, for education and skills development in the general population, making businesses interact with government electronically and by serving as a role model for e-commerce integration. In these countries, IT industries are encouraged through incentives and are supported with the importation of

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international expertise to jump-start investment and educational programs (Corbitt and Thanasankit, 2002). A study by Lertwongsatien and Wongpinunwatana (2003) examined small and medium enterprises in Thailand and described the factors that differentiated e-commerce adopters from non-adopters. These included organization size, top management support for e-commerce, existence of an IT department within the organization, perceived benefits and compatibility, and industry competitiveness. Wong (2003) conducted a study of e-commerce diffusion in Singapore and found that the biggest reason companies had not adopted e-commerce was that the top management did not see e-commerce as necessary. However, the most important perceived barriers for e-commerce adoption among non-adopters were cost and security, followed by the lack of readiness of customers or suppliers. Despite the benefits that e-commerce can provide, not all organizations have been successful in assimilating web technologies for shaping their e-commerce initiative. Since these technologies are complex and offer a variety of functionalities ranging from the static presentation of content to the dynamic capture of transactions with provisions for security and personalization, organizations must understand web technologies and decide how to draw upon their functionalities for developing e-commerce initiativeswhich could range from static product catalogs to active, dynamic, and interactive solution development and virtual community networking and marketing (Chatterjee, Grewal, and Sambamurthy, 2002). Based on the review of literature, we propose a model of e-commerce adoption (Figure 1) that suggests that the decision to adopt e-commerce is primarily determined by the managers/owners perceptions of how much strategic value this innovation can bring to the firm. In this model, strategic value is influenced by five factors: entrepreneurial orientation, organizational readiness, the external environment, owners/managers perception of customers ease of use, and owners/ managers perceived usefulness for the customer. Perception of Strategic Value of E-Commerce Diffusion of Innovation theory suggests that individuals or decision makers within an organization will evaluate an innovations characteristics (relative advantage, compatibility, complexity, trialability, and observability) and their perceptions of these characteristics will determine whether that individual or organization will adopt this innovation

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JOURNAL OF INTERNET COMMERCE FIGURE 1. Model for E-Commerce Adoption in SMEs

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(Fichman, 2000). In the case of an organization, strategic value can be determined by a summation of perceived benefits minus a summation of perceived costs over a period of time. This can be represented by the following formula:

SVi = PB PC
t =1 t =1

t= n

t= n

(1)

where SV = Strategic Value for a specific innovation PB = Perceived Benefits PC = Perceived Costs i = a particular innovation t = time.
The benefits frequently attributed to an e-commerce implementation include increased number of transactions, new customers, better service to key customers, and increased profit and market share. Costs associated with an e-commerce implementation include cost of hardware, software, development, and possible loss of customer goodwill. Only few studies have focused on the strategic value of e-commerce. A study by Amit and Zott (2001) was based on a review of literature in entrepreneurship and strategic management. They developed a valuedrivers model that included four factors that were found to be sources of value creation of e-commerce: transaction efficiency, complementarities, lock-in, and novelty. Amit and Zott (2001) pointed out that the greater

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the transaction efficiency gains that are enabled by a particular e-business application, the lower the cost and hence the more valuable it will be (p. 503). Some of these factors were confirmed in Saloner and Spences (2002) work. For example, these researchers pointed out that the most important area in which e-commerce can create value is by reducing transaction costs involved in bringing buyers and sellers together. Subramanian and Nosek (2001), in a related study, developed an instrument that they indicated could be used to measure the perceived strategic value derived from an e-commerce application. The study tested 10 items that included cost reduction, improved customer services, improved distribution channels, achieved operational benefits, better access to information, access to methods and models in making decisions, improved communication, improved managers productivity, strategic decision support, alternative suggestion or decision support, and corporative partnership support. These 10 items loaded into three factors which Subramanian and Nosek labeled operational support, managerial productivity, and strategic decision aids. Grandon and Pearson (2003) validated this model in two different settings (a developing country, Chile, and a developed country, the United States) and concluded that the three factors developed by Subramanian and Nosek (2001) have a significant impact on managers attitudes toward e-commerce adoption. Lower operating costs and transaction costs are one reason cited for the adoption of the Internet among business firms (Seyal and Rahman, 2003). Small businesses may adopt e-commerce because of the availability and decreasing cost of sophisticated hardware and software, and the overall benefits that can be achieved by SMEs who adopt e-commerce (Seyal and Rahman, 2003). A study by Teo and Tan (1998) also emphasizes that lower operational cost is one of the primary reasons firms in Singapore adopted an Internet initiative. RESEARCH QUESTIONS According to the aforementioned concepts, this study raises the following research questions: 1. Does an entrepreneurial orientation have a positive affect on perceived strategic value? That is, if managers have an entrepreneurial orientation will they perceive strategic value in e-commerce?

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2. Does organizational readiness have a positive affect on perceived strategic value? That is, if an organization is ready for e-commerce implementation, will it perceive strategic value in e-commerce? 3. Do external factors have a positive affect on perceived strategic value? That is, if an organization is in competitive environment/industry, with support (or barriers) from government, will it perceive strategic value in e-commerce? 4. Does perceived ease of use have a positive affect on perceived strategic value? That is, if an organization sees e-commerce as simplifying the customer interactions, will it perceive strategic value in e-commerce? 5. Does perceived usefulness have a positive affect on perceived strategic value? That is, if an organization sees e-commerce as being useful to its customers, will it perceive strategic value in e-commerce? 6. Does perceived strategic value have a positive affect on e-commerce adoption? That is, if an organization perceives strategic value in e-commerce, will it adopt e-commerce and what will be the level of adoption? METHODOLOGY Subjects For this study, we targeted owner/managers of SMEs throughout Thailand. Different criteria have been utilized to determine small- or mediumsized businesses. In our study, we considered the number of employees as the principal criteria since other categorizations such as those involving revenue and/or total capital can frequently result in misleading classifications of organizations. The number of employees considered in a smallor medium-sized business varies according to the agency providing the definition. Harrison, Mykytyn, and Riemenschneider (1997) as well as Iacovo, Benbasat, and Dexter (1995) utilized a cut-off of 200 employees to make comparisons with prior studies involving IT and small businesses. For the purpose of this study, we used the definition suggested for SMEs in Thailand provided by the APEC Center for Technology Exchange and Training for Small and Medium Enterprises (less than 500 employees).

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Instrument Development Twenty-six managers/owners of small or medium businesses in the province of Khon Kaen participated in a pilot of the survey instrument. Feedback of the pilot study resulted in minor changes to survey instructions and questions. The final instrument included a brief definition of e-commerce in order to clarify the concept. Respondents were asked to complete the instrument that had the following major sections: five demographic questions about the respondents gender, age, education, position in the organization, and years of work in present position; nine general questions about the organization; and five questions about the respondents familiarity with e-commerce. The remainder of the questions measured factors that we believe will differentiate between adopters and non-adopters of e-commerce. A 5-point Likert-type scale (from Strongly disagree to Strongly agree) was utilized for the 38 questions relating to e-commerce adoption. Data Collection Data for this study were gathered by means of an Internet based survey. Data collection was carried out in two steps. First, e-mail addresses of 730 small- and medium-sized businesses in Thailand were selected from an English-based Thai portal Website. An e-mail was sent to these addresses containing the link to the survey instrument; however, a large number of these e-mails were returned due to delivery failure, resulting in 482 deliverable e-mails. Two additional e-mail reminders were sent to these organizations asking them to complete the instrument for the research project. During the second step, 497 more e-mail addresses were gathered from a Thai Yellow Pages Website. The final number of deliverable e-mails was 400 due to delivery failure. Again, two e-mail reminders were sent to these organizations asking them to participate in the research project. This process resulted in 882 e-mail surveys being sent to owner/managers in Thailand over a 2-month period. Demographics of Study There were 155 respondents in this study: 55 indicated that they were e-commerce adopters and 100 indicated that they were not adopters (see Table 1). Of the 155 respondents, 69% are male, 55% are in the age range of 30-39, and 57% hold a bachelors degree. There are similarities between adopters and non-adopters: 36% of the adopters and 40% of

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JOURNAL OF INTERNET COMMERCE TABLE 1. Demographics of Study

Adopter (N = 55) Non-Adopter (N = 100) 62 38 23 57 15 5 0 0 3 5 58 34 0 0 40 14 10 13 15 6 20 23 21 9 27 92 49 39 36 61 39 62% 38% 23% 57% 15% 5% 0% 0% 3% 5% 58% 34% 0% 0% 40% 14% 10% 13% 15% 6% 20% 23% 21% 9% 27% 92% 49% 39% 36% 61% 39%

Gender Male Female Age 20-29 30-39 40-49 50-59 60-69 > 70 Education High school Technical college 4-Year college Masters degree Doctorate Other Type of business Manufacturing Wholesale Retail Construction Service Other Years in business 0-5 years 6-10 years 11-15 years 16-20 years < 20 years PC use Clerical support Process/production support Decision making support Strategic planning support Website Have No

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45 10 11 28 9 6 1 0 1 4 28 22 0 0 20 9 5 4 9 6 15 11 7 6 13 50 23 27 31 49 4

82% 18% 20% 51% 16% 11% 2% 0% 2% 7% 51% 40% 0% 0% 36% 16% 9% 7% 16% 9% 27% 20% 13% 11% 24% 91% 42% 49% 56% 89% 7%

Janejira Sutanonpaiboon and Ann M. Pearson TABLE 1 (continued)

Adopter (N = 55) Website done In-house Outsourced
*

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Non-Adopter (N = 100) 25 34 25% 34%

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23 22

42% 40%

Number may not add to respective totals due to missing data.

the non-adopters are manufacturers. Both adopters (91%) and nonadopters (92%) indicate that their PCs are used for clerical work. Eighty-nine percent of the adopters have a website, and 42% of those websites are developed/maintained in-house. Sixty-one percent of the non-adopters also have a website; however, 34% of those websites are outsourced. Familiarity with E-Commerce Most of the respondents97% overallindicate they are very familiar or somewhat familiar with e-commerce. Sixty-two percent of the adopters indicate that they are implementing B2B e-commerce, and 62% of the non-adopters point out that if they adopt e-commerce in the future, they will also do B2B e-commerce (see Table 2). RESULTS This study investigates differences between adopters and non-adopters of e-commerce. Specifically, it looks at their perceptions as to the strategic value of e-commerce, the owner/managers entrepreneurial orientation, organizational readiness for e-commerce, perceived ease of use of e-commerce, perceived usefulness of e-commerce, and perceptions about how specific external factors can influence the adoption decision. Perceived Strategic Value of E-Commerce Not surprisingly, there was very little difference between adopters and non-adopters. The development of the Internet, the World Wide Web (WWW), the development of the global business environment, and coverage provided by the popular press make it almost impossible for the modern business person to not be aware of the potential strategic

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JOURNAL OF INTERNET COMMERCE TABLE 2. E-Commerce in Thailand

Adopters (N=55) Non-Adopters (N=100)

E-commerce Familiarity Very familiar 19 34 0 34 26 5 35% 62% 0% 62% 47% 9% 9 69 22 62 53 7 9% 69% 22% 62% 53% 7%

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Somewhat familiar Not familiar E-commerce Type B2B B2C B2G

value that e-commerce can have on an organization. This finding suggests that owners and managers of SMEs in Thailand are aware of the potential importance of e-commerce in the current business environment. Only three of the sixteen items were significantly different between adopters and non-adopters: implementing e-commerce would enable my organization to process transactions at a lower cost, implementing e-commerce would enable my organization to provide better service to my customers, and implementing e-commerce would enable my organization to expand its market share. The concepts covered by these three items are important, however. They suggest that adopters believe e-commerce impacts three areas critical to business success: expand market share, provide better service to customers, and lower transactions costs (see Table 3). An evaluation of the mean scores indicates that adopters and nonadopters valued the same four items as key contributors to the perceived strategic value of e-commerce. These items indicated that (1) both groups recognize that implementing e-commerce can generate new business opportunities for their organization; (2) adopters and non- adopters also believe that implementing e-commerce will allow their customers to complete their transactions more quickly; (3) both groups indicated that they believe e-commerce has the potential to enable their organization to increase the availability of their products or services to their customers; and (4) adopters and non-adopters recognize the opportunity e-commerce provides in reaching new customers. That these items were rated highly is not surprising. These are important benefits of e-commerce that are frequently cited in both academic and practitioner literature (Amit and Zott, 2001; Chatterjee et al., 2002; Grandon and Mykytyn, 2004; Grandon and Pearson, 2003; Mirchandania and Motwani, 2001).

Janejira Sutanonpaiboon and Ann M. Pearson TABLE 3. Perceived Strategic Value of E-commerce
Item Mean Adopters SD

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t-test Significance

Non- Adopters NonAdopters Adopters

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Implementing e-commerce would Enable my organization to generate new business opportunities. Enable my customers to complete transactions more quickly. Increase the availability of our products or services to our customers. Help my organization to reach new customers. Enable my organization to provide better service to my customers. Enable my organization to process transactions more quickly. Enable my organization to process transactions at a lower cost. Enable my organization to have better access to customer information. Enable my organization to have better access to supplier information. Enable my organization to reduce the cost of doing business. Enable my organization to expand its market share. Enable my organization to develop stronger relationships with our customers. Enable my organization to retain existing customers. Provide my customers with a more satisfying shopping experience. Enable my organization to develop stronger relationships with our suppliers. Enable my organization to increase sales to existing customers. 4.06 4.04 4.00 3.95 3.83 3.81 0.614 0.848 0.775 0.759 1.002 0.862 0.959 0.340 1.314 0.191 1.342 0.182

3.98 3.86 3.80 3.73 3.66

3.88 3.57 3.63 3.33 3.58

0.860 0.749 0.849 0.777 0.848

0.932 0.907 0.886 1.053 0.842

0.687 0.494 2.100 0.038 1.198 0.234 2.565 0.011 0.520 0.604

3.62

3.34

0.901

0.892

1.764 0.081

3.61 3.59 3.49

3.41 3.26 3.41

0.850 0.876 0.784

0.913 0.965 0.940

1.333 0.185 2.084 0.039 0.545 0.587

3.41 3.38 3.34

3.18 3.27 3.14

0.876 1.008 0.961

1.066 0.888 0.878

1.431 0.155 0.646 0.520 1.257 0.212

3.29

3.13

1.006

1.060

0.934 0.353

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Entrepreneurial Orientation There are three sections for this construct (see Table 4). The first section indicates that both adopters and non-adopters believe they need to be entrepreneurial. The two significant items indicate that adopters believe their organizations are more entrepreneurially oriented than do non-adopters and also that their organization is more entrepreneurially
TABLE 4. Entrepreneurial Orientation of SME
Item Mean Adopters SD t-test Significance

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Non- Adopters NonAdopters Adopters 0.700 0.912 1.847 0.067

4.02 3.77 For your market, how entrepreneurially oriented do you think your organization should be? How entrepreneurially oriented is 3.92 3.50 your organization? Compared to your immediate 3.72 3.23 competitors, how entrepreneurially oriented do you think your organization is? How well does your organization do the following? Improve the quality or number of 3.73 3.19 features of your products or services before your competitors do. Find new business or markets to 3.56 3.18 target. Create new products that will 3.52 3.28 provide value to new or existing customers. Enter new markets before your 3.46 3.01 immediate competitors. Re-engineer your processes to 3.44 2.93 make them more efficient than your competitors processes. Improve value to your customers 3.44 3.08 through non-product means (distribution, advertising, or communication) before your competitors do. Find ways to create value for 3.37 3.11 new or existing customers through partnerships with vendors. Introduce new products or ser3.30 2.99 vices before your competitors do.

0.730 0.928

0.984 0.957

2.992 0.003 3.039 0.003

0.717

0.762

4.279 0.000

0.752 0.804

0.825 0.782

2.820 0.006 1.763 0.081

0.779 0.802

0.940 0.858

3.116 0.002 3.635 0.000

0.938

0.907

2.240 0.027

0.894

0.844

1.757 0.082

0.814

0.950

2.051 0.043

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TABLE 4 (continued)
Item Mean Adopters SD t-test Significance

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Non- Adopters NonAdopters Adopters 0.013 0.128

Strive to lower costs faster than 3.22 2.88 0.730 0.797 2.533 competitors. Create partnerships with the best 3.19 2.96 0.930 0.798 1.535 partners in the industry before your competitors can. Price aggressively to increase 3.17 3.07 0.901 0.914 0.636 market share. Find non-product ways to create 3.17 3.11 0.834 0.792 0.480 value for new or existing customers. To what extent do you agree with or disagree with the following statements concerning risk? The risk of missing an opportunity 3.86 3.80 0.722 0.887 0.476 is just as important as the risk of failure; it is important not to miss significant opportunities. There is almost always a way to 3.75 3.76 0.659 0.859 0.100 avoid failure, one way or another. To make effective changes to our offerings, we must be willing to accept at least a moderate level of risk of significant losses. 3.69 3.77 0.678

0.526 0.632

0.635

0.920

0.764 0.667 0.506

oriented than their immediate competitors. These findings suggest while both adopters and non-adopters feel an entrepreneurial orientation is important for SMEs in Thailand, the adopters are more aggressive at, or willing to take the risk associated with, developing ecommerce. The second section contains items that determine how well the SMEs develop their organization. Seven of twelve items were significant. Both adopters and non-adopters felt their organizations were better than their competitors in improving product features, finding new markets or businesses, and creating new products. However, adopters believed more strongly in these concepts than do non-adopters. Non-adopters felt least strongly about the following: re-engineering processes to make them more efficient than your competitors processes, strive to

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lower costs faster than competitors, create partnerships with the best partners in the industry before your competitors can, and introduce new products or services before your competitors do. These suggest that non-adopters are more reluctant to make changes to processes, incur costs, establish partnerships, and modify products. The implementation of e-commerce would entail making such changes. The third section addresses an organizations willingness to take or accept risk. There were no significant difference between adopters and non-adopters. This suggests that both groups recognize that risk is part of doing business. This is especially true for SMEs as they typically do not have the resources to compete against larger organizations; this requires SMEs to take on more risk just to survive. In fact, adopters and non-adopters agree that an organization must be willing to accept risk to make effective changes and the managers should not be punished for unsuccessful risk-taking. Overall, both adopters and non-adopters believe that an entrepreneurial orientation is important in e-commerce adoption, but the adopters believe more strongly than non-adopters in this concept. Perceived Ease of Use Six of seven items testing the owners/managers perception of their customers ease of use were significant (see Table 5). The only item not found to be significant (0.059), was our customers would have no trouble using an e-commerce system to review information about company products. Where many technology adoption studies (Davis, 1989; McCloskey, 2004; Venkatesh et al., 2003) look at the users perception of ease of use, this study looks at customers ease of use from the owners/managers perspective. Therefore, the adopters and non-adopters have significantly differing perceptions of how easy it would be for their customers to use an e-commerce system. An evaluation of the mean scores indicates that adopters and nonadopters differ in their perception of customers ease of use of e-commerce. Adopters ranked our customers would find e-commerce convenient to use, our customers would consider e-commerce to be a pleasant shopping experience, and our customers would have no trouble using an e-commerce system to review information about our company as most important. However, non-adopters ranked only one of these items as most important (our customers would have no trouble using an e-commerce system to review information about our company). This suggests that

Janejira Sutanonpaiboon and Ann M. Pearson TABLE 5. Owner/Managers Perceived Ease of Use for Customer
Item Mean Adopters SD

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t-test Significance

Non- Adopters NonAdopters Adopters 3.07 3.07 0.640 0.677 0.775 0.761 4.129 3.611 0.000 0.000

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Our customers would find e-commerce convenient to use. Our customers would consider e-commerce to be a pleasant shopping experience. Our customers would have no trouble using an e-commerce system to review information about our company. Our customers would have no trouble using an e-commerce system to review information about company products. Our customers would find e-commerce easy to use. Our customers would have no trouble using an e-commerce system to complete a transaction.

3.57 3.52

3.47

3.14

0.809

0.941

2.243

0.027

3.39

3.11

0.827

0.939

1.905

0.059

3.29 3.04

2.85 2.71

0.923 0.894

0.850 0.810

2.832 2.223

0.006 0.029

non-adopters felt customers could access online information, but would not find e-commerce convenient to use or enjoyable. Two items were ranked lowest by both adopters and non-adopters: our customers would find e-commerce easy to use and our customers would have no trouble using an e-commerce system to complete a transaction. However, the adopters felt more confident about these items than did the non-adopters. Therefore, even though adopters had some doubt about these issues, the doubt did not hinder the implementation of the system. As previously mentioned, many technology adoption studies (Davis, 1989; McCloskey, 2004; Venkatesh et al., 2003) focus on perceived ease of use from the customers perspective. This study looks at the owners/managers perception of the customers ease of using an ecommerce system. If the owner/manager is entrepreneurial and open to change, it is likely that he will have a positive perspective of his customers ability to use the system. On the other hand, if the owner/manager is not entrepreneurial, there is likely to be concern about the customers ability/willingness to adapt to change. The adopters in this study felt more positive than the non-adopters about their customers ability to use and enjoy an e-commerce system.

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Perceived Usefulness Six items tested the owners/managers perceived usefulness of ecommerce to their customers. Three items were significantly different between adopters and non-adopters of e-commerce (see Table 6). Adopters believed that e-commerce would lower the cost of doing business with our organization to our customers, e-commerce would provide our customers with more information about our products, and e-commerce would be useful to our customers. The three items that showed no significant differences included e-commerce would save our customers time in their shopping experience, our customers would trust that purchases made through an e-commerce system would be secure, and our customers would trust that purchases made through an e-commerce system could be returned in the event of problems. Therefore, both adopters and non-adopters had similar concerns about
TABLE 6. Perceived Usefulness for the Customer
Item Mean Adopters E-commerce would provide our customers with more information about our products. E-commerce would be useful to our customers. E-commerce would lower the cost of doing business with our organization to our customers. E-commerce would save our customers time in their shopping experience. Our customers would trust that purchases made through an e-commerce system would be secure. Our customers would trust that purchases made through an e-commerce system could be returned in the event of problems. 4.16 SD t-test Significance

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NonAdopters NonAdopters Adopters 3.69 0.784 0.876 3.257 0.001

3.84 3.72

3.49 3.25

0.703 0.671

0.861 0.838

2.633 3.650

0.010 0.000

3.63

3.35

0.824

0.860

1.929

0.056

2.94

2.74

1.008

0.815

1.245

0.216

2.90

2.81

0.900

0.846

0.610

0.544

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their customers trust of security and return policies in the e-commerce environment. An evaluation of the mean scores for the items related to this construct indicate that, although there are significant differences between the two groups, the two items adopters and non-adopters of e-commerce rank highest are e-commerces ability to provide customers with information about company products, and the general usefulness that e-commerce could provide. Several authors have suggested that e-commerce allows a company to push information to its existing and potential customers (i.e., automated e-mails related to product discounts), thereby, making it easier for these customers to make action decisions (Fichman, 2000; Harrison et al., 1997; Sharma and Gupta, 2003). Another study has found that customers prefer shopping via e-commerce because of reduced travel, ease of transactions, and reduced search time provided by electronic product catalogs (McCloskey, 2004). The evaluation of the mean scores also indicates that both groups have concerns about how much their customers would trust an e-commerce application. This could be an important reason why non-adopters have not undertaken an e-commerce initiative. If the owner/manager strongly believes that the organizations customers will not trust this new type of business, then his perception as to the strategic value of e-commerce will be diminished. Adopters, although concerned about trust, may have ideas or strategies that they believe can overcome this issue and will proceed with their e-commerce initiative. According to TAM (Technology Acceptance Model), perceived usefulness is expected to exhibit a direct effect on usage intentions (Agarwal, 2000). A study by McCloskey (2004) reveals perceived usefulness is a significant indicator of continued usage. Perceived usefulness was measured in terms of how an individual thinks Internet shopping can save time, is more convenient, is useful because products can be easily found and purchased, and is easier than purchasing items from a store (McCloskey, 2004). Therefore, from an organizations point of view, an organization perceives e-commerce as being useful if its management believes that e-commerce can save time and increase convenience for customers. Both the adopters and non-adopters in this study believed e-commerce would provide customers with information and be useful to the customers. Consequently, it appears that the non-adopters recognize the usefulness that e-commerce can offer, but hesitate to implement an e-commerce system for other reasons.

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Organizational Readiness All items for this construct were significant (see Table 7). This indicates that adopters and non-adopters have significantly differing
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TABLE 7. Organizational Readiness
Item Mean Adopters E-commerce is compatible with the needs of our business. with our organizational values. with our preferred work practices. with other systems my organization uses. with the culture of our organization. My organization has the financial resources to implement e-commerce. the financial resources to support e-commerce. the technological resources to implement e-commerce. the technological resources to support e-commerce. the logistics necessary to support e-commerce. the personnel to support e-commerce. the personnel to implement e-commerce. the inventory capacity to support e-commerce. In general, my organization would support the use of an e-commerce system. Management understands the importance of e-commerce. Management understands the strategic importance of e-commerce. My managers would support my decision to implement e-commerce. SD Non- Adopters NonAdopters Adopters 2.95 2.93 2.90 2.86 2.80 0.764 0.663 0.728 0.734 0.744 1.051 0.964 0.974 0.887 0.875 5.445 5.228 4.836 4.901 3.190 0.000 0.000 0.000 0.000 0.002 t-test Significance

3.78 3.64 3.60 3.54 3.24

3.59 3.49 3.39 3.35 3.31 3.27 3.24 3.20 3.84

3.26 3.15 2.88 2.81 2.71 2.83 2.59 2.74 2.95

0.804 0.834 0.918 0.925 0.769 0.918 0.929 0.782 0.703

0.948 0.934 1.040 0.982 1.009 0.975 0.962 0.981 1.056

2.185 2.270 3.040 3.228 3.979 2.719 3.954 3.097 6.119

0.031 0.025 0.003 0.002 0.000 0.008 0.000 0.002 0.000

3.84 3.80

3.27 3.20

0.612 0.722

0.893 0.916

4.539 4.325

0.000 0.000

3.75

3.11

0.771

0.994

4.309

0.000

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views concerning the readiness of their organizations to adopt e-commerce. An evaluation of the means shows some interesting findings. In the first section of the construct, the adopters and non-adopters rank the items similarly. However, the non-adopters do not feel as strongly that e-commerce is compatible with the needs of the business, organization values, preferred work practices, other systems, and the organizational culture. Even though both groups ranked compatibility with other systems and culture lowest, the adopters have less concern than nonadopters about these concepts. In the second section, both adopters and non-adopters indicate they have the financial resources to implement and support e-commerce, but the adopters feel more strongly than non-adopters about these concepts. The non-adopters rank logistics necessary to support e-commerce, personnel to implement e-commerce, and inventory capacity to support e-commerce lowest indicating these items as obstacles to e-commerce implementation. The third section of this construct indicates that adopters get considerably more management support of e-commerce than do non-adopters. In fact, non-adopters rank in general my organization would support the use of an e-commerce system lowest, indicating that their managements overall view of e-commerce is not supportive. A study by Seyal and Rahman (2003) indicates that there is a direct link between the success of IT adoption process and CEO attitudes toward the adoption of IT, and that management support is a significant predictor of Internet adoption. Since an e-commerce adoption requires considerable financial investment, management has to realize the benefits of e-commerce in order to provide managerial and financial support for adoption and utilization of the technology. Implementation of e-commerce requires an organizations commitment in many areas. The organization has to be certain that the Internet infrastructure can support e-commerce activities. Internet infrastructure includes the computers and software connected to the Internet and the communication networks over which the message packets travel (Schneider and Perry, 2001). The finance/managerial support and logistic/ inventory must be considered. Since much of e-commerce involves trading of physical goods as opposed to information goods, it requires complementary support of a logistics infrastructure for its physical fulfillment (Wong, 2003). Most SMEs are convinced that having an impressive website is good enough to inform the world about their existence (Seyal and Rahman, 2003).

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External Factors Seven items tested external factors that influence e-commerce adoption in Thailand (see Table 8). Two of these items relate to competition and were significant. Three significant items relate to industry. Two items relate to government and were not significant. An evaluation of the mean scores indicates that both adopters and non-adopters consider e-commerce an important economic function of the economy since it was ranked second for both groups. Concerning government support of e-commerce, adopters and non-adopters seem to agree that the government is supportive of e-commerce, but incentives to implement e-commerce may be lacking or ineffective. It is interesting that non-adopters ranked government support of e-commerce first and adopters ranked it fifth suggesting that non-adopters may be looking toward the government for guidance. It is also interesting that nonadopters, though realizing competitors will likely force e-commerce implementation, have not progressed in their own implementation.
TABLE 8. External Factors
Item Mean Adopters Competition will make it necessary for our organization to implement e-commerce. E-commerce is considered an important economic function of our economy. In order to be a leader in my organizations industry, we need to implement e-commerce. Many organizations within our industry have implemented e-commerce. Our government is generally supportive of e-commerce. Competition is forcing my organization to implement e-commerce. The government provides incentives for my organization to implement e-commerce. 3.80 SD t-test Significance

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Non- Adopters NonAdopters Adopters 3.05 0.800 1.137 4.661 0.000

3.75

3.23

0.868

0.912

3.370

0.001

3.51

2.79

0.967

1.104

4.077

0.000

3.47

2.83

0.924

1.130

3.676

0.000

3.41 3.35

3.29 2.60

1.023 0.934

0.861 0.968

0.695 4.568

0.489 0.000

2.84

2.59

0.934

1.001

1.475

0.143

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The industry within which an organization operates plays an important role in e-commerce adoption. Thailand is an agricultural country and most of the SMEs outside the metropolitan areas are family-owned, agriculture-related businesses such as rice mills and food producers. Therefore, they are not very likely to undertake an e-commerce initiative. Newer industries, such as consultant, advertising, insurance, law, and accounting, tend to adopt e-commerce more than traditional industries. DISCUSSION It becomes obvious that the reason non-adopters have passed on e-commerce implementation is that the organization is not ready to make that change because of cultural, technological, financial, and/or logistical reasons. Thailand has been described as affiliation-oriented, very low in individualism with high-power distance, and a preference to avoid uncertainty. A study by Swierczek (1989) indicates that technology did not appear to be a significant dimension of Thai organizational culture. Thai managers were not aware of the impact of technology and had no experience in integrating technology within their organizations. Considerable education was required for these managers to realize the influence of technology adoption. In addition, technology adoption in an organization can be seen as a culture change problem. The organization has to learn new practices and re-define itself in more substantial ways that involve deep cultural assumptions. Therefore, an e-commerce adoption may not be highly compatible with the Thai organizational culture. The major inquires of this study were to examine the current level of e-commerce utilization, the individual and organization characteristics that impact e-commerce adoption, and the factors that influence e-commerce adoption among Thai SME owners. Only one-third of the organizations participating in the study were adopters of e-commerce even though both adopters and non-adopters recognize the strategic value of implementing e-commerce. The adopters tend to be more entrepreneurial oriented than non-adopters. The adopting owners/managers hold a positive perception of their customers ease of use in using the e-commerce implementation. Likewise, the adopting owners/managers believe that their customers will find the implementation useful even though they were hesitant about customers trust of the system. The adopters feel more driven by the external factors of competition and industry to implement e-commerce. However, the type of industry defi-

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nitely influences the necessity and urgency of an e-commerce implementation in Thailand. Overall, it was shown that organizational readiness strongly influences e-commerce implementation. Managerial support and financial, logistical, and technological factors weigh heavily in determining if an SME in Thailand can pursue e-commerce implementation. LIMITATIONS All studies have limitations. With survey instruments, there is the possibility of ambiguity. Survey items may be misread or misunderstood and provide limited information. The sample size could be a limitation. A larger sample may provide more diverse or convincing results. Collecting data from only one country can also be a limitation. The results may not be generalizable to other countriesdeveloped or non-developed. FUTURE RESEARCH Future research could expand on this study. A replication done in a developed country would provide data for comparison. Though this study included important variables, other studies could focus on variables such as cultural implications for e-commerce implementation, organizational views on technology adoption, or governments role in e-commerce implementation support. REFERENCES
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Submitted: 11/01/05 Revision: 01/05/06 Accepted: 02/01/06 doi:10.1300/J179v05n03_03